Intel Warns Partners: Expect Tight SSD Supply Through 2017, With Shipment Priority On Data Center SSDs

Intel is warning its channel partners that demand for SSDs is expected to outstrip supply for all of 2017, forcing the company to prioritize its production for data center SSDs over lower-cost consumer SSDs.

Intel, one of the industry's top SSD vendors and a popular supplier of enterprise SSDs to the U.S. system builder and OEM market, told partners in an "Intel SSD Supply Health Messaging" memo that the SSD and NAND memory industry is experiencing record demand across all markets.

As a result, SSD supply is expected to remain tight for all of 2017, Intel said in the memo, the contents of which were confirmed for CRN by multiple sources.

[Related: Meet Optane: Intel Releases First SSDs With 3D XPoint Memory Tech]

The tight supplies have pushed Intel to focus its production on data center-class SSDs, the Santa Clara, Calif.-based company said in the memo.

"Intel will prioritize supply for the fast growing datacenter market and will materially increase year on year product availability for this segment," Intel wrote in the memo.

Intel also wrote in the memo that it was "aggressively" transitioning part of its business to 3D NAND SSDs. "Customers are encouraged to immediately qualify and ramp 3D NAND products and work with Intel to forecast your demand," the company wrote.

Intel declined to respond to a request for more information, citing the company's "quiet period" before its upcoming quarterly financial report.

The SSD shortage stems from a combination of fast-growing demand for SSDs as the per-gigabyte price falls closer to that of slower-performing spinning hard disks, and a transition by manufacturers of NAND memory, the key component in SSDs, toward 3D NAND technology, according to multiple industry sources.

Custom system builders and solution providers are feeling the pinch from Intel's tight SSD supply situation.

Intel SSDs tend to be the most popular model for enterprise customers, said Jeff Olson, vice president at Northern Computer Technologies, or Nor-Tech, a Burnsville, Minn.-based custom server and storage system builder with a focus on the enterprise business.

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